This year was supposed to be a banner year for sports TV. Now advertisers are scrambling to figure out where to put their money as live events get scrapped or postponed.

Los Angeles Lakers forward LeBron James, right, shoots as Memphis Grizzlies forward Jaren Jackson Jr. defends during the first half of an NBA basketball game Friday, Feb. 21, 2020, in Los Angeles. (AP Photo/Mark J. Terrill)

  • Delayed and canceled live sports events this year has scuttled plans for advertisers that typically spend billions on TV advertising with broadcast networks and sports leagues.
  • Buyers said that most advertisers who were supposed to advertise in the cancelled March Madness tournament got their money back and are sitting on it due to the economic climate.
  • Some advertisers moved ad dollars from TV to esports and OTT streaming, but those audiences don’t replace the live sports TV audience.
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This was supposed to be a good year for sports broadcast networks with the Tokyo Summer Games, the National Collegiate Athletic Association’s March Madness tournament, games from the National Basketball Association, Major League Baseball, and events like the Masters.

With the exception of the cancelled March Madness tournament, all of the events have been postponed until later this year or next year due to concerns about coronavirus.

That’s left billions of ad dollars hanging and agencies racing to put together contingency plans as big advertisers like travel brands, restaurants, and retailers slash ad spending. While the National Football League — the largest and most prized sports inventory for advertisers — has not announced any schedule changes, some agencies are already planning for scenarios like a postponed season.

The stakes are high for the networks, leagues, and the advertisers that pour money into sports programming. According to Kantar, advertisers spent $910 million running TV ads in last year’s March Madness tournament. Data from analytics firm iSpot.TV found that the NFL’s ad revenue during the 2019 regular season hit $4.5 billion.

Even as TV viewership for news and entertainment programming spikes, agencies say that audience growth isn’t enough to offset the decline of live sports. Sports agencies are preparing for a possible uptick in ad spend later this year when live events return but say it’s unclear how big it’ll be.

“We’re not under any guise that we’re going to be able to make up this valuable sports audience in the short-term but we’re not taking a short-term view on it,” said Jeremy Carey, managing director of Omnicom’s sports ad-buying agency Optimum Sports. “We’re trying to make sure that when the supply is there that we’re prepared to execute for our clients that need to be there.”

Advertisers’ decisions are changing daily

According to three TV ad execs, advertisers mostly pocketed the money from the cancelled March Madness in preparation of coronavirus’ economic impact, even though CBS and Turner that were scheduled to air March Madness games offered advertisers the chance to spend the money elsewhere.

“By and large, most marketers were comfortable dropping that money back down to their bottom line,” said David Campanelli, chief investment officer of Horizon Media. “We were bracing for an onslaught of dollars — I don’t think that happened.”

Since then, agencies say that they are in daily and weekly talks with the leagues and broadcast networks about postponed events. Discussions change constantly and vary wildly from client to client, said Gibbs Haljun, GroupM’s managing director of media investment.

“The name of the game for most clients is more flexibility,” he said. “There is no one-size-fits-all.”

Some sports advertisers are putting money into entertainment programming, and those that are still advertising are often asking for tweaks to make their messages fit the times, he said.

Networks may have problems fitting in backlogged sports programs

Pushing sports events to later in the year also means that networks will have a flood of programming to cram in that will overlap with each other. In one scenario, agencies are preparing for the NBA and NHL playoffs and the start of the MLB season will air in late summer.

“The bright side of things is that everyone does expect that there’s going to be such pent-up excitement and demand that staying in the NBA playoffs could be a huge home run,” Horizon Media’s Campanelli said.

Some marketers are seeking digital alternatives to TV

Optimum Sports’ Carey said esports programming like Twitch, Fox’s virtual NASCAR races and the NBA 2K video game being broadcast on ESPN can be advertising alternatives for the lack of live events.

He said sports clients are asking lots of questions about esports but that the audience isn’t an exact replacement for that of live sports.

Similarly, while streaming platforms like Hulu and Roku have also seen viewership increases. GroupM’s Haljun said that some clients may shift money from postponed events to OTT but that the over-the-top TV doesn’t have the same reach and frequency as TV.

“It takes a long time to build reach in a lot of these [digital] platforms and it takes a lot of impressions to get it,” he said. “There are great investments across the board, but it’s a balancing act of how much goes into one platform versus another.”

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